Balancing personal and process safety, ensuring crew competency will lead way to sustainable future, industry success

By Linda Hsieh, managing editor

David Williams is chairman, president and CEO of Noble Corp and 2013 IADC chairman.

Noble, as well as the wider drilling industry, have undertaken a significant newbuild program in the past several years. What have been some of the biggest challenges amid all this activity?

In my opinion, one of the most significant challenges Noble, and this industry, faces relates to the hiring, training and retention of the crew members needed to operate the newbuilds. This challenge is further heightened by the coming wave of retirements expected across the industry over the next several years. These two factors combine to form a powerful personnel requirement for our industry. While individual drilling contractors are dealing with this challenge in different ways, the simple fact is that you can’t create competent crews overnight.

For this reason, Noble and other drillers continue to increase our investments in training designed to ensure every crew member is equipped to do their jobs competently. That thinking was the idea behind the creation of our NEXT Center, which integrates state-of-the-art training simulators and curriculum with fleetwide collaboration and communications tools. Having a competent, well-trained and credentialed workforce is critical to our long- and short-term success. It is also important we ensure that credentials don’t rely solely on passing a test – but instead they should indicate that a person has demonstrated his or her level of competence.

Industry has been working to achieve a better balance between process safety and personal safety. Do you think those efforts have been successful so far?

I believe there has always been a need to find a balance between personal and process safety. You can’t really have one without the other, and our operations have to achieve that balance all the time. It is safe to say that attention to process safety has received more attention in recent years. At Noble, for example, we have strengthened our well control processes and preventive maintenance procedures – as well as redoubling our efforts in process safety training. As a result, I believe we are doing a better job in terms of overall workplace safety.

Has industry lost any focus on personal safety due to increasing emphasis on process safety?

I think the reverse has happened. At the same time that we have been increasing our efforts on the process safety side of the equation, we have changed our orientation regarding personal safety, particularly as it relates to the sort of events we track and how they are measured. As a result, we are actually focusing much more time and energy on high-potential incidents where there is potential for injury. For example, a bolt falling out of the derrick may smash someone’s finger, but it could cause a fatality as well.

We’ve taken much more care to look critically at every incident and near-miss and analyze the potential. We want to know what could’ve happened and then work to address that potential. Overall, these changes will improve personal safety in both the near and longer term.

What are the challenges in tracking potential and near-misses?

Getting our team members to report “potential” injuries and then subjecting those events to critical evaluation can be difficult. There is a risk that those evaluations are subjective and may vary from one operation to another. To take the subjectivity out of the process, we established a metric to monitor trends and performance, and we are working on common standards and terms for reporting incidents. I believe other companies are doing this, as well. If so, that’s a trend that would be extremely beneficial for the industry.

What is your take on implementing and executing a uniform set of operational and safety standards for Noble’s rigs around the world, across multiple countries and geographies?

Operational and safety standards at Noble are the same across the globe. A Noble employee gets the same indoctrination whether he’s setting foot on the Noble Roy Rhodes in the Middle East or the Noble Julie Robertson in the North Sea or the Noble Bill Jennings in Mexico. From how we conduct ourselves to how we execute our work, we expect our employees to walk the talk, and that is uniform across geographies and rigs. Of course, we observe local rules and regulations in the various countries where we operate, but the core values, processes and policies we follow don’t change from rig to rig or market to market.

The Noble Bob Douglas, which entered service in late 2013, is under contract to Anadarko. The drillship is drilling offshore New Zealand before being deployed to the US Gulf of Mexico later this year.

How do you make allowances for differing cultures?

Culture is different than competency. The Noble culture, which traces back almost 100 years to our roots as a company, is based on Lloyd Noble’s view of empowering people and giving them the training and tools to do their job effectively. That may sound simplistic, but the basic premise we follow transcends culture. There’s a sense of pride that comes with wanting to do the job right the first time, safely and efficiently. I also stress to our team that we each have a responsibility for maintaining a safe workforce and wellbore integrity. That’s not subject to negotiation, even if the operator wants to do something we don’t agree with.

Offshore drilling contractors have had to continually adjust to new operational and regulatory requirements, especially since Macondo. What have been some of the most significant changes Noble has made in the past few years to comply with new rules or requirements?

I don’t know that we’ve had to make a lot of changes in how we do things. Certainly we see lower tolerance for risk from the government and regulators, and sometimes that has resulted in what we feel are unnecessary stack pulls. This is more of a procedural issue, however, and not a fundamental change in how we work.

I do believe the impact of the 2010 moratorium in the Gulf of Mexico was long felt and, frankly, is still being felt. When the industry is shut down without warning, one should expect long-lasting effects. For example, we took a number of rigs out of the Gulf, and as an industry we are just now starting to migrate some of those rigs back.

We’ve also spent significant amounts of capital on subsea spares in order to manage the enhanced requirements for certifying and maintaining our BOPs. We’re still anxiously waiting to see what the US government might do next in terms of BOP requirements. If they demand a complete redesign of BOP stacks and don’t give industry sufficient time to do it, there will be a huge impact on the industry. There is high demand for rigs around the world, and it would be a mistake to think that the Gulf is the only venue where these units can work.

Is a hard-line approach something that you’re expecting from US regulators?

From our discussions with regulatory bodies, we expect a more measured approach in how we ensure the integrity of the equipment. As an industry, we are paying a lot more attention to details and in documenting how our critical equipment is maintained. I think, overall, we’re much more comfortable with the attitude of the regulators since the moratorium, and I think they’re also more comfortable with us. They’re realizing that this industry has a lot of smart and highly trained people. As a result, I have a very positive long-term outlook for the Gulf of Mexico.

How do you think industry’s approach to risk management is evolving as we work in more difficult drilling environments?

We risk-assess more things, and we assess them more critically than before – from a human interaction perspective, tool perspective and environmental perspective. What are the risks? How are we going to mitigate those risks? What are the consequences of failure, and how do we deal with that? Those are the broad questions that are part of our risk management exercise.

The Noble Jim Day, operating in the US Gulf of Mexico, is contracted to Shell into 2016. Noble has spent significant capital on subsea spares to manage enhanced requirements for certifying and maintaining BOPs in the GOM.

During your term as chairman in 2013, IADC kicked off its efforts to establish the Well Control Institute (WCI), a new industry body that will provide a single, universal well control training and assessment standard for the drilling industry. How do you think the WCI will impact the industry?

The intent of the Well Control Institute is to provide a basis of training that the industry can embrace, whether it’s a land driller in the Permian Basin or a driller on a deepwater rig. We want to provide a standard of training that’s applicable to everyone so all contractors and operators can get behind it. The goal here is not “pass or fail” testing, so we will not be training people to pass a test. We want to ensure a certain level of learning and retention so we know we have competent workers, and I think the Well Control Institute will be the vehicle to provide that level of competence.

With the number of new rigs that are being added to the global fleet, are you concerned that the drilling market might move into an oversupplied environment?

There’s still a place for some of the older rigs, particularly those units that have been well maintained and upgraded over the years. That being said, a lot of the wells we’re drilling now can’t be drilled efficiently with lower-spec rigs. In my mind, whether we overbuild or not, most of the projections for deepwater are based on the successes that operators have. If you look at the exploration successes from the past few years, the number of discoveries is phenomenal. We’re also seeing deepwater discoveries across a broad geographic base, so it’s not just the US Gulf of Mexico, Brazil and West Africa anymore. Our view is that not just the operators but also the governments in those countries will want access to those reserves, and that will drive development opportunities.

We should remember, however, that this is a cyclical business, and it will continue to be cyclical. However, many rig contracts now have enough term to provide some cycle transparency for the next few years, and that gives us the flexibility to make strategic investments. We’re going to continue to invest in newbuilds because the economics and viability of those programs are still very good.

Some of the deepwater discoveries that were made in the past five to 10 years are moving into the development stage. Do you see any shifts in operations or rig equipment needs due to a greater focus on development drilling?

Most of the recent orders for floaters have been new drillships. This does not mean, however, that there isn’t a need for more and better semis. In fact, the reverse may be true. Compared with a drillship, a semi can be a very stable platform, and as a result they make a great development tool. As we move into a more development-focused phase, we might see more opportunities for semisubmersibles. Especially as our operating environment gets harsher, the stability of the platform will become more critical.

Also, a number of operators around the world will be looking at opportunities in the Arctic. Many of those opportunities are in different environmental areas under different rules and in different water depths, so there isn’t a one-size-fits-all solution. Building a rig on spec for the Arctic is going to be nearly impossible, but as we go through the exploration phase there, I think we’ll see some purpose-built assets.

Last year at an IADC Houston Chapter luncheon, you spoke passionately about the need for people to be engaged in the political process and influence American energy decisions. Are there any issues that you think are especially important for people to speak up about?

The oil and gas industry provides more than 10 million jobs in the country. That’s a sizable and important part of the US workforce. We also contribute significantly to US government revenues. At a time when we have a huge deficit, this is a great opportunity for government to support an area of the economy where there is true job creation and opportunity. Those opportunities aren’t confined to a few states or select regions but literally nationwide.

In the case of my own company, Noble alone has hired more than 1,000 people a year for the past three years. To me, that signals that, from a governmental perspective, this industry is vital to the overall health of the economy. There’s so much we can do by a thoughtful process of making acreage available to operators to drill and a license to operate in places that are currently off limits.

This industry has a national workforce, and we’ve created jobs all over the country. I believe we need to do a better job motivating our people – getting them engaged in the political debate and engaged with their local, state and federal government representatives. They need to talk about what this industry can do and what this industry means.

The Keystone XL pipeline, hydraulic fracturing, access to offshore acreage, etc, are things that can create jobs and create benefits for the United States. We need to be engaged so the government knows what the people demand. We need to be heard.